Source: Financial Times
The fall of U.S. and British banks has been swift and thorough-going as these maps from the Financial Times show. In 1999, U.S. banks were far and away the dominant players in global finance. Today, Chinese banks have a market capitalization as big as U.S. and British banks combined. Worldwide, bank capitalization as a share of global GDP has declined from around 12 percent to less than five percent. In the UK, bank capitalization has crashed from more than a quarter of GDP to less than five percent.
Bonus: Click here for a list of the world’s 50 safest banks.
April 8th, 2009 at 2:05 pm
These are very interesting charts that lead to the question of what you can buy with money. It is easy to buy goods and commodities for the benefits of consumption. You can also buy companies for the benefit of future cash flows generated by these companies. Technologies can also be “bought” but it takes time to commercialize technologies and there are intrinsic risks like inefficient market and technological obsoleteness. Can you “buy” talents, tolerance, and other “soft” assets? Assume there is unlimited financial capital available to invest in these areas, it is arguably possible. But at what cost and for how long?
If building up an innovation-oriented culture with high tolerance to diversity leads to sustainable prosperity, this process requires coordinative efforts from both public sector and private sector. Capitalization reflects market valuation on companies and industry sectors and changes when more information becomes available in the market. This process varies from country to country as capital markets are regulated differently, sometimes to substantial degrees in countries. It may also be interesting to compare public regulations in world’s regions and market responses in different cultures.
What about other dimensions of banking industry? If we look at revenues at geographic segments, for revenue in 2007, Goldman Sachs had 51% from US, 29% from Europe, Middle East and African (EMEA), 20% from Asia; Citi Group had 48% from North America, 12% from EMEA, 17% from Latin America, 24% from Asia (excluding Japan); Bank of Nova Scotia had 58% from Canada, 8% from US, 11% from Mexico, 24% from other International; RBC had 66% from Canada, 21% from US, 12% from other International; Bank of China had 98% from China (including HK/Macau), 2% from other Oversea Locations.
What about the ease of doing business at different regions? World Bank has a map for that at http://rru.worldbank.org/businessplanet/. Although this is not necessary an indication for banking industry to achieve operational efficiency or fend off new entries, the map shows another dimension of differences and provide a potential dimension for changes in the next decade.
Another question to ask is how much capitalization there is outside of these banks. In a broader financial industry, insurance companies and alternative investments like hedge funds, private equity and venture capital absorb significant financial capital in some of the world’s regions. If we look at a broader industry sector for financials, the top 20 global companies based on market capitalization are the followings:
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(Market Cap in $billion) Company Name (Stock ticker)
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(183.6)Industrial and Commercial Bank of China Limited (SEHK:1398)
(142.3)China Construction Bank Corporation (SEHK:939)
(137.4)Berkshire Hathaway Inc. (NYSE:BRK.A)
(111.1)HSBC Holdings plc (LSE:HSBA)
(102.4)JPMorgan Chase & Co. (NYSE:JPM)
(99.7)China Life Insurance Co. Ltd. (SEHK:2628)
(89.4)Bank of China (SEHK:3988)
(65.3)Elf Aquitaine Group (ENXTPA:AQ)
(63.8)Banco Santander, S.A. (CATS:SAN)
(63.0)Wells Fargo & Company (NYSE:WFC)
(59.5)SPDR Trust Series 1 (ARCA:SPY)
(58.7)Mitsubishi UFJ Financial Group, Inc. (TSE:8306)
(53.6)Goldman Sachs Group Inc. (NYSE:GS)
(52.0)Itau Unibanco Banco Multiplo S.A. (BOVESPA:ITAU4)
(47.1)Bank of America Corporation (NYSE:BAC)
(46.1)Ping An Insurance (Group) Co. of China Ltd. (SEHK:2318)
(42.2)Westpac Banking Corporation (ASX:WBC)
(40.7)BNP Paribas (ENXTPA:BNP)
(40.5)Royal Bank of Canada (TSX:RY)
(40.1)Allianz SE (DB:ALV)
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If we take all the public companies that have market capitalization larger than $10 billion, we will have 128 companies with the following global distribution:
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(Total Market Cap) Region (company #)
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(70043) Africa / Middle East (5)
(142474) Latin America and Caribbean (5)
(869498) Europe (31)
(1147576)United States and Canada (42)
(1354966)Asia / Pacific (45)
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* all data are from Capital IQ.
April 8th, 2009 at 2:17 pm
And for the same 128 companies, the following has the distribution of market capitalization based on countries.
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MarketCap Country
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978.7 United States of America (34)
786.2 China (16)
201.6 United Kingdom (6)
195.1 France (6)
188.4 Japan (8)
181.0 Canada (9)
169.0 Australia (6)
142.5 Brazil (5)
130.0 Hong Kong (8)
109.1 Spain (3)
103.8 Germany (4)
99.5 Switzerland (4)
86.5 Italy (3)
45.2 Saudi Arabia (3)
34.7 Sweden (2)
34.5 Singapore (3)
22.7 Korea, South (2)
14.8 Russia (1)
14.3 India (1)
13.7 South Africa (1)
13.5 Netherlands (1)
11.2 Kuwait (1)
10.9 Belgium (1)
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* all data are from Capital IQ.
January 18th, 2011 at 8:43 am
? homeowners in these states especially can would like to require advantage of home insurance discounts so as to get a lower rate on their home insurance. On the other hand, the five least expensive states for home insurance are.